Your Property Records, Like Fine Wine, Need to Age Properly

Danielle Herring
September 19, 2019

Many companies like to report unclaimed property as soon as it shows up as abandoned on their books. I understand the desire to get the records reported to the state and out of your hair, but you may wish to slow down and let those records age.

Why is this important? One reason is that you are not allowing enough time to find your customers and reunite them with their property. If you can contact that customer, it’s likely your business relationship will continue and you’ll benefit from their patronage for some time to come. Another reason is that many states don’t want you to send records early without their express, written permission.

How do you know when the property has aged long enough to be reported to the state? I’ll give you a quick lesson on calculating dormancy. All states have a list in their handbook or somewhere on their website listing each type of property code they will accept and the dormancy value that is assigned to each code. Each state has a cutoff date, also known as the Period End Date that is used to calculate the dormancy.

For our example, we’ll look at MS05, Customer Overpayments, for the state of Tennessee. The dormancy value assigned to this code is 3 years. The cutoff date for this spring’s Tennessee report is 6/30/2019. You simply take 6/30/2019 and subtract 3 years. This means you will send the state all MS05 property with a last transaction date of 6/30/2016 or earlier. It’s very simple when you look at it this way.

If you’d rather not have to calculate the dormancy manually, you’re in luck. Unclaimed property software can come to the rescue. For example, Sovos unclaimed property software already contains tables with dormancy values for each property code in every state. When you run a report, the system looks at the cutoff date for the state you are processing and automatically calculates the dormancy based on the last activity date values you have entered, so you only report the records that qualify. If you have permission to report records early, it’s still no problem. You can use a status value of Force on Report and the system will ignore the dormancy calculation.

Whether you rely on a manual process, build your own reporting system, or use a software provider, it’s always in your best interest to let your records age appropriately. Of course, it also helps to perform your due diligence and try to contact the rightful owners in the meantime.

Take Action

Learn more about Sovos unclaimed property compliance solutions

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.


Danielle Herring

In her role as compliance manager for unclaimed property reporting, Danielle Herring oversees support of the product, researches changes in state unclaimed property laws so the system is updated to comply with them, and tests changes to the system before they are released. Danielle also completes some report and letter processing for current clients, assists with their direct support, provides customer training, and helps with troubleshooting and questions about using the product. Outside of work, Danielle loves to garden and is a master gardener.
Share This Post

North America Sales & Use Tax
June 1, 2023
3 Things to Remember if You Get a Sales Tax Notice

Have you ever received a sales tax notice from a state department of revenue? Whether you answered yes or no, there are important things to keep top of mind to help keep your business prepared. Finding out that you have failed to comply with one or more of your sales tax obligations can be startling. […]

North America Unclaimed Property
May 30, 2023
How to Set Up a Successful Unclaimed Property Program

Unclaimed property compliance can be difficult and overwhelming. Clients often ask what they should be doing to ensure they are compliant with the various laws and regulations. It isn’t easy, especially if you have multiple property types such as checks, credits or customer accounts that have the potential to become unclaimed property in multiple states. […]

North America ShipCompliant
May 30, 2023
How Hold At Locations Improve Your Customers’ Wine Delivery Experience

Direct-to-consumer shipping wine lovers enjoy the convenience of having their favorite vinos shipped to their front door. But what happens when, for whatever reason, they aren’t available to accept their wine deliveries? Whether they aren’t available during the day or they don’t have someone 21 or older available to sign for their package, these challenges […]

North America Sales & Use Tax
May 30, 2023
Identifying Sales Tax Liabilities and Why They Matter

By Steve Claflin, CLA It’s incredible that it has now been five years since the landmark Wayfair decision. It seems like just yesterday we were reading the case, alerting clients and tracking the ever-developing state guidance. Unfortunately, many companies still are not familiar with their sales tax filing obligations caused by economic nexus, or they […]

North America ShipCompliant
May 25, 2023
Out-of-State Breweries Gain Self Distribution, DtC Rights in Oregon

Under a settlement agreement, breweries located outside of Oregon now have more options for selling into the Beaver State, including direct-to-consumer (DtC) shipping and self-distribution to retailers. The settlement arose out of a lawsuit filed by a group of Washington breweries last year challenging Oregon laws that limited beer self-distribution to in-state breweries and DtC […]